Retirement: Those Who Save AheadRobert Siegel talks with Dallas Salisbury, president and CEO of the Employee Benefit Research Institute, about retirement planning in the United States. Salisbury talks about who is saving, who is not, and how much people are actually putting away.

Robert Siegel talks with Dallas Salisbury, president and CEO of the Employee Benefit Research Institute, about retirement planning in the United States. Salisbury talks about who is saving, who is not, and how much people are actually putting away.

ROBERT SIEGEL, host:

As we just heard, the Bakers have stock, they have savings, she has a state pension. Dallas Salisbury is the president and CEO of the Employee Benefit Research Institute. He says this makes the Bakers' experience far from typical. Most Americans face a bleaker retirement.

Mr. DALLAS SALISBURY (President and CEO, Employee Benefit Research Institute): Forty-three percent, for example, of today's retirees have total savings of less than $25,000, and over half of today's workers have savings of less than $25,000. Today only about 17 percent of private workers, another 9 percent of public workers will have any kind of pension opportunity after they end up retiring.

SIEGEL: But a great many workers have retirement plans such as 401(k)s or they've been able to take advantage of IRAs over the years. Typically, how much have people put into those plans?

Mr. SALISBURY: Well, regrettably, not a great deal. The average balance of IRAs today is less than $40,000. The average balance of 401(k) plans is about $75,000 for those that have been through a full working career. And for those that change jobs more frequently, it ends up being closer to 20 to $25,000.

SIEGEL: Is this particular generation that's on the verge of retirement--and I guess technically the Bakers are a little bit older than true baby boomers. We count the boom from those born in 1946 through 1964. Is this generation especially better prepared or worse prepared for retirement than previous generations?

Mr. SALISBURY: It's worse prepared and going to be worse prepared in at least four ways. First, fewer of them will have pension income. Secondly, very few will have retiree medical benefits. Thirdly, they will end up with housing debt, home equity lines of credit, as the proportion of individuals in their older ages, meaning older boomers, who have paid off their mortgages is quite a bit lower than those that went before them. And fourth, they end up with longer life expectancy. So you end up with all of these factors against the one thing that both Christine and John suggested; they really want to spend it now because they just don't know how long they're going to last. And compared to my father and others like him who had that annuity income plus Social Security and retiree medical, they spent everything they wanted to spend early but the pension was there when they lived a long time.

SIEGEL: Mr. Salisbury, thank you very much for talking with us.

Mr. SALISBURY: Thanks for having me.

SIEGEL: Dallas Salisbury is president and CEO of the Employee Benefit Research Institute in Washington, DC.

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